The Ministry of Industry (MoI) has approved the master plan on paper industry development through 2020, which says that Vietnam will need VND95,569 billion (US$5.97 billion) to foster the industry.
Of this amount, VND87,664 billion (US$5.48 billion) will be used for building paper plants, while VND7,905 billion (US$494.06 million) will be injected in forest plantation projects. Vietnam will focus on pulp production, which will help settle the imbalance between pulp and paper plants and will consume domestic material supplies.
According to the Vietnam Paper Association, Vietnam’s white paper output has seen only a slight increase over the last 20 years.
In 1975, Vietnam’s paper output was 46,000 tons, equal to that of Indonesia. However, there is now a big gap in the output of Vietnam and Indonesia (824,000 tons vs. 7,800,000 tons).
Vu Ngoc Bao, Secretary General of the Vietnam Paper Association, has attributed the slow development of the paper industry to improper investment.
If Vietnam had made US$400-500 million investment in pulp plants in the past (a small investment sum in the national economy), it would not be reliant on pulp imports at the present.
As Vietnam did not make appropriate investment in pulp plants, pulp domestic production can meet just 37 per cent of the demand, while the other 63 per cent must be fed by imports.
Pulp output is expected to decrease in the future as a lot of pulp plants have had to shut down as they do not have water treatment systems and modern production technologies; therefore, their production may pollute the environment.
The labor cost in Vietnam is low, but labor productivity is also low. A Japanese laborer in the paper industry can produce 806 tons of paper every year, while a Vietnamese can produce only 140 tons.
The technologies applied by Vietnam prove to be backward compared to those in the rest of the world, and it is understandable why the quality of Vietnam-made paper remains at low level.
The biggest pulp production chain in Vietnam can produce 61,000 tons a year, while a chain on Hai Nan Island in China can churn out 1 million tons.
In fact, many foreign investors come to Vietnam to seek investment opportunities in the paper industry, but as their offers are not accepted, they leave for China.
The master plan says that Vietnam will focus on developing the material area which can provide enough material to make 600,000 tons of pulp by 2010, and 1,800,000 tons by 2020. By 2020, the domestic paper industry will meet 70 per cent of the domestic demand. (VietnamNet)
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